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Following the launch of PartyGaming’s new backgammon site at PartyGammon.com, and its major sponsorship of the 2006 WSOP (a sponsorship speculated to cost GBP 20 million), the company made headlines again when it announced its GBP 500 million acquisition plan to expand its influence into the sportsbook sector. According to “The Guardian”, the announcement, which dominated mainstream UK business news this week, PartyGaming will use the proceeds of a bond issue that could rise as much as GPB 500 million to fund the planned expansion. Sources indicate that a privately-owned but yet to be identified European operator will be PartyGaming’s first purchase – a purchase that will be relatively small as far as fund-raising goes. Apparently, talks have progressed nicely and the final deal could be announced shortly. According to additional bond market sources who have been briefed on PartyGaming’s plans, further deals are in the offing. Mitch Garber, PartyGaming’s new chief executive and the group’s controlling shareholders are committed to ‘de-risking’ by diversifying earnings and the size of the fund-raising reflects this committment. PartyGaming’s share price has suffered considerably as a result of attempts by conservative Senators in Washington to ban or at least restrict online gambling in the U.S. Approximately 80 percent of the group’s customer’s live in the U.S. PartyGaming, along with several other online gambling companies such as Ladbrokes have made a policy decision not to accept sports bets from the U.S. so as not to run into problems with the U.S. anti-online gambling lobby. Interestingly, Sportingbet, a rival company, does accept sports bets from residents of the United States. Reportedly, PartyGaming has paid GBP 20 million to gain wall-to-wall exposure at the televised World Series of Poker events coming up next month in Las Vegas. The World Cup most likely had something to do with PartyGaming’s expansion decision as most online poker sites admitted privately that June brought a fall in activity at their sites because so many European online poker players started focusing their attention on the football games instead of poker. While bookmakers had anticipated greater profits from the World Cup than they are currently seeing, the popular football event was still a huge marketing boost for sports betting companies, especially in Europe. The lower profits are apparently a result of the lack of surprise outcomes in the football matches. Related Links: Posted on: July 6, 2006
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